Vermilion plans $400 million notes offering for acquisitions

CALGARY, AB - Vermilion Energy Inc . (TSX: TSX:VET) (NYSE: VET), an international energy producer with a market capitalization of $1.48 billion and current trading price of $9.59, announced today its intention to issue up to US$400 million in senior unsecured notes in a private offering aimed at qualified institutional buyers. The eight-year notes are subject to market conditions and other factors.According to InvestingPro analysis, Vermilion's stock has shown significant volatility, with more insights available through additional ProTips on the platform.

The proceeds from the offering are earmarked for several potential uses. Vermilion may opt to redeem or repay its existing 5.625% senior notes due in 2025, fund a portion of the acquisition of Westbrick Energy Ltd., cover transaction fees and other costs related to these activities, or repay a portion of outstanding borrowings under its credit facilities. The company currently maintains a debt-to-equity ratio of 0.36 and an Altman Z-Score of 2.99, indicating fair financial health according to InvestingPro's comprehensive financial analysis.

The new notes will not be registered under the U.S. Securities Act of 1933 or applicable state securities laws, and will not be offered or sold in the United States without registration or an exemption from these requirements. Similarly, the notes will not be qualified for sale in Canada under its securities laws and will only be offered in a manner exempt from the prospectus requirements.

Vermilion has made forward-looking statements regarding the size, terms, and use of proceeds from the offering. While the company believes these expectations are reasonable, it cautions that they are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ.

These forward-looking statements depend on various assumptions and factors, such as current and future economic conditions and anticipated developments. Risks include the possibility that the offering or the acquisition of Westbrick Energy may not close as planned or at all, as well as general economic, market, and business conditions.

Vermilion's operations span North America, Europe, and Australia, focusing on light oil and liquids-rich natural gas. The company prioritizes health, safety, and environmental protection, along with profitability and strategic community investment. With a current dividend yield of 3.48% and analysts projecting profitability for this year, InvestingPro's Fair Value analysis suggests the stock may be undervalued at current levels. Detailed valuation metrics and growth projections are available in InvestingPro's comprehensive research report, part of their coverage of over 1,400 US equities.

This press release, based on a press release statement, does not constitute an offer to sell or a solicitation of an offer to buy any security.

In other recent news, Vermilion Energy Inc. has made significant strides in its growth strategy. The company has announced a definitive agreement to acquire Westbrick Energy Ltd. for $1.075 billion, a move that will increase Vermilion's operational scale and improve its full-cycle margins in the Deep Basin. The acquisition, expected to close in the first quarter of 2025, will add 50,000 barrels of oil equivalent per day of stable production and approximately 1.1 million acres of land in the Deep Basin, as well as four operated gas plants.

In addition to the acquisition, Vermilion has also announced its 2025 budget, which includes a capital expenditure plan of $600 to $625 million. This budget is set to support a production guidance of 84,000 to 88,000 barrels of oil equivalent per day. The company has also reported strong results from its second deep gas exploration well in Germany and plans to invest $380 million in North American assets and approximately $230 million across Europe.

The company's Q3 2024 earnings report showed a 7% year-over-year increase in production and a 19% quarter-over-quarter rise in fund flows from operations. Vermilion's CEO, Dion Hatcher, announced plans for significant production increases, particularly from the Mica Montney project in Canada. Vermilion's executives have outlined a hedging strategy, with 50% of production hedged for 2024 and 2025, and 40% for 2026. These recent developments reflect Vermilion's ongoing commitment to growth and shareholder value.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.